UGA study: Minimum wage hikes don't help poor | News

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ATHENS, Ga. -- Lawmakers and pundits who want to help the poor by raising the minimum wage should instead focus on other policy tools, according to a study from the University of Georgia.

The minimum wage currently earned by U.S. workers is $7.25 an hour and a bill has been introduced to raise the federal minimum wage to $9.80.

The recent UGA study looked at how minimum wage increases can decrease poverty in America. According to the report, they don't.

"By and large, evidence says that minimum wage increases don't go to the people they are intended to help and that there are other policy tools that are more effective at helping the working poor," said Robert Nielsen, a UGA assistant professor of housing and consumer economics who co-authored the study.

Ongoing efforts across the country try to make sure people who are working earn enough money to support their families-without having to work multiple jobs. Over time, a person's wages lose buying power, and every several years there is an effort to increase the wage to recover some of that purchasing power, Nielsen said.

"Regardless of who is looking at it, minimum wage increases nearly always result in null findings­ -- almost no one finds any positive effects for helping families through minimum wage increases," Nielsen said. "As a policy tool, it doesn't reach the right people."

The study reveals most minimum wage earners aren't family breadwinners, and they aren't poor. In fact, 87 percent of the beneficiaries from the last wage increase were not poor; instead, they lived in households with incomes at least two times greater than the poverty threshold.

Half of poor Americans age 16 to 64 don't work, according to the report, so an increase in wage won't affect their status either.